Google, Microsoft Back Off on Datacenter Plans - Page 2

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An ill wind hits Chicago

Microsoft's Chicago datacenter is supposed to be for its Live and on-demand strategy, and by all reports from its own blog posts, the site looks very near completion.

The site is being kept somewhat under wraps in that Microsoft has not disclosed all of the details behind its construction. This is not unusual, as Google is equally guarded when it comes to datacenter construction. The Chicago datacenter is reported to be built using modular containers, with Rackable Systems the rumored provider. However, neither Microsoft nor Rackable would confirm this.

A source close to the construction told InternetNews.com on condition of anonymity that the work at the Chicago site has been significantly scaled back and much is left uncompleted. He reports the containers are being brought in but not hooked up. "It's being handled like a big storage facility. They might bring power in, but they are talking about it months from now," he said.

The containers there are only being wired for environmental controls for heating and cooling. They are not being networked or connected to the Internet at all. The project has seen the number of workers cut in half, the source added.

Microsoft has already disclosed some of these cutback details. It said in October that construction and container testing at the Chicago datacenter had entered into a second phase in Chicago, resulting in a workforce reduction, from 900 construction workers working 24x7 with 3 separate shifts, to approximately 450 construction staff, working one shift of 40 hours a week.

"Online and Live services are a major focus of Microsoft, and as we continue to build out our offerings and the Chicago data center, we’re working to make the right, smart operational and data center investments for today and tomorrow," said Michael Manos, general manager of data centers in Global Foundation Services at Microsoft in an e-mailed statement to InternetNews.com.

Things are even murkier regarding the planned $500 million datacenter in West Des Moines, Iowa, which was announced in August. When the Azure platform was announced at Microsoft's Professional Developer's Conference in October, the press release contained references to a number of datacenters, including Chicago, but not West Des Moines.

There often is a lag time between announcement and build-out, since these are not trivial undertakings. Microsoft told the blog Data Center Knowledge that it is in the design phase of the datacenter and plans to open it in the coming years. Beyond that, it would not discuss the facility any further.

Why delaying makes sense

Andi Mann, senior analyst with Enterprise Management Associates, isn't surprised at the delays in datacenters. "Both companies are looking to expand their services, cloud services specifically, but the potential client base for them is holding off. Industries like financial, manufacturing and retail are all taking a hit with the recession at the moment," he told InternetNews.com.

Given the huge cost for these facilities – Google's South Carolina facility was $600 million – he's not surprised they are trying to save. "There's no reason why they should be immune to this slow down. IT is well positioned to weather the recession, People are just looking to see what they can delay," said Mann.

The industry, said Mann, learned its lesson after the dotcom bubble burst and everyone was left with too much inventory, capacity and hardware. "IT is not running fat. IT is already running lean. IT cut back earlier in the decade and never expanded to the huge proportions of the late '90s," he said.